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H.R. 3948: Protection of Source Code Act

The text of the bill below is as of Feb 8, 2018 (Reported by House Committee).


IB

Union Calendar No. 412

115th CONGRESS

2d Session

H. R. 3948

[Report No. 115–549]

IN THE HOUSE OF REPRESENTATIVES

October 4, 2017

(for himself, Mr. David Scott of Georgia, and Mr. Hultgren) introduced the following bill; which was referred to the Committee on Financial Services

February 8, 2018

Additional sponsors: Mr. Messer and Mr. Gottheimer

February 8, 2018

Reported with amendments, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed

Omit the part struck through


A BILL

To prohibit the Securities and Exchange Commission from compelling a person to produce or furnish algorithmic trading source code or similar intellectual property to the Commission unless the Commission first issues a subpoena, and for other purposes.


1.

Short title

This Act may be cited as the Protection of Source Code Act.

2.

Procedure for obtaining certain intellectual property

(a)

Persons under Securities Act of 1933

Section 8 of the Securities Act of 1933 (15 U.S.C. 77h) is amended by adding at the end the following:

(g)

Procedure for obtaining certain intellectual property

The Commission is not authorized to compel under this title a person to produce or furnish source code, including algorithmic trading source code or similar intellectual property that forms the basis for design of or provides insight to the source code, to the Commission unless the Commission first issues a subpoena.

.

(b)

Persons under the Securities Exchange Act of 1934

Section 23 of the Securities Exchange Act of 1934 (15 U.S.C. 78w) is amended by adding at the end the following:

(e)

Procedure for obtaining certain intellectual property

The Commission is not authorized to compel under this title a person to produce or furnish source code, including algorithmic trading source code or similar intellectual property that forms the basis for design of or provides insight to the source code, to the Commission unless the Commission first issues a subpoena.

.

(c)

Investment Companies

Section 31 of the Investment Company Act of 1940 (15 U.S.C. 80a–30) is amended by adding at the end the following:

(e)

Procedure for obtaining certain intellectual property

The Commission is not authorized to compel under this title an investment company to produce or furnish source code, including algorithmic trading source code or similar intellectual property that forms the basis for design of or provides insight to the source code, to the Commission unless the Commission first issues a subpoena.

.

(d)

Investment Advisers

Section 204 of the Investment Advisers Act of 1940 (15 U.S.C. 80b–4) is amended—

(1)

by adding at the end the following:

(f)

Procedure for obtaining certain intellectual property

The Commission is not authorized to compel under this title an investment adviser to produce or furnish source code, including algorithmic trading source code or similar intellectual property that forms the basis for design of or provides insight to the source code, to the Commission unless the Commission first issues a subpoena.

; and

(2)

in the second subsection (d), by striking (d) and inserting (e).

February 8, 2018

Reported with amendments, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed